Building On To The Iphone

SOFTWARE DEVELOPERS IN STATE SEEK TO EXPLOIT APPLE EFFORT

July 19, 2008|By ZACHARY ABRAHAMSON; Courant Staff Writer

Apple's CEO, Steve Jobs, got loud applause in March when he announced that the newest model of the iPhone, which hit stores last week, would be able to run software applications developed outside the company.

Many consider the new App Store for the iPhone 3G an attempt by Apple to build a broad new industry around its trendy smartphone, which is basically a small portable computer that can access the Web and perform tasks well beyond its basic function as a cellphone.

Two Connecticut software developers are among those looking to take advantage of the App Store, where iPhone users can choose from hundreds of additional features for their phones.

The companies are Avon-based Conquest Consulting and Milford-based DataViz. Both have been in the business of building software for mobile devices for years, and both are betting on the iPhone.

"I believe it's a pretty big revolution," said David Coons, who runs Conquest Consulting with his partner, Lance Leifert. "Look at the iPod. Now nobody says, 'Where's my mp3 player?' It's 'Where's my iPod?' That's where the iPhone is headed."

Neither Connecticut company has its software in the App Store yet.

DataViz said it hopes its program will be available by the end of the year or early in 2009. Kathleen McAneany, business manager for the project, says the software will be an iPhone version of the company's popular Documents to Go software, which allows smartphone users to edit and create documents in Microsoft Word, Excel and Powerpoint from their phones. The program should cost about $50, though Dataviz says it's too soon to commit to an exact price.

Conquest doesn't have a name for its program yet. Leifert says the application is based on the ACT! program, a contact and project information manager. Conquest's program, set for release by January 2009 at an annual subscription of $300, will synch ACT! data with a home PC and let users access and edit that information on the road.

"Mobile software development makes up about 15 percent of our revenue stream," Leifert said, adding that he expects to sign up about 1,000 subscribers during the software's first year. "We're looking for that to grow."

Optimistic analysts, such as Piper Jaffray's Gene Munster, say Apple could sell 45 million phones by the end of 2009. Apple said it moved 1 million of the phones within 72 hours after they first went on sale last Friday.

Software developers point to another number: 10 million. That's the number of applications downloaded from App Store during the same period.

Many of those programs are free; some analysts put the number at 80 percent. And free programs mean less pay for developers.

And not everybody's on the iPhone train just yet. Elia Freedman, CEO of Beaverton, Ore.-based Infinity Softworks, pointed out that there are still big roadblocks to push aside before software developers can fully capitalize on the iPhone.

"I've been in this business 11 years, and every two years customers switch to a new platform," Freedman said. "That makes it very difficult to keep up with the market."

Freedman said he thinks the smartphone market will have to consolidate before software development can really take off. Right now, the largest part of the market is split among Palm Inc.; Research In Motion, makers of BlackBerry devices; and Apple's iPhone. Windows Mobile also takes a decent-sized market share.

To reach enough consumers to make a profit on their software, developers need to program for more than one platform, Freedman said. But that costs the developer more in programming and licensing fees. Freedman thinks one platform will have to gain a dominant market share - 70 or 80 percent - before developers can really profit.

Still, Munster thinks the iPhone could create a $1 billion-plus "ecosystem," a microeconomy consisting of Apple, accessory manufacturers and software developers, by the end of next year. Not bad for an industry that didn't exist until last Friday.

"I think the App Store's great. It's industry-changing," said Rob Hoxie, director of business development at DataViz. "Apple's proving what we've always known, which is that mobile software is important."